In our latest Impact Chat, Social Invest Director Luke Cross speaks to Imran Mubeen, Director of Treasury at Bromford. Bromford is a not-for-profit housing association  that own and manages around 45,000 homes across the Midlands, is one of the sector’s biggest builders of social housing and plans to raise £1bn of sustainable finance in the coming years. The conversation covers the role of sustainability-linked finance and the status of social landlords’ relationship with funders.

Below are some key talking points form the discussion:

Despite the headlines, ESG isn’t dead…

Luke and Imran kicked off this month’s Impact Chat by discussing the reputational challenges that ESG has faced in recent times.

Despite rising pressure on ESG to prove its worth from some quarters, Imran remained confident in its purpose.

He said: “We speak to our leading bank funders, and everything is coming back to the ESG agenda. We’re not seeing any lack of enthusiasm or any dwindling appetite for ESG disclosure or discussion around performance.”

Sustainability data needs improvement

Although Imran was resolute on his belief in ESG, he did highlight some weaknesses in ESG reporting relating to the social housing sector.

He says sustainability reporting is “still very nascent” and notes that “one of the challenges we are up against is data quality”.

Imran acknowledges that Bromford has been open with its stakeholders about these challenges, which is a useful exercise in itself.

Sector specific approach is required

Another challenge Imran identifies is the increasing amount of data requested by investors and funders who are making “many more demands than they were even two years ago on sustainability-linked loans or the sustainable finance framework”.

Imran acknowledged that this is driven, in part, by demands from the Loan Market Association (LMA).

He suggests that a sector-specific approach to data would “really help funders ask the right questions of housing associations and would allow housing associations to provide data in a way that is reasonable and robust”.

Impact of loan linkage is in accountability

Luke highlights questions around the true impact of sustainability linked finance, which has also been an area of contention.

Imran notes that there is not a significant financial benefit of doing sustainability-linked deals but that the benefit is the accountability these types of loans bring.

“I think the loan at least helps to create a conscious awareness of the things that we’ve committed to in our corporate strategy and ensures that we can’t hide if we’re underperforming,” he says.

ESG should be a two-way street

Imran laid out the many requirements that funders put on housing associations to demonstrate their sustainability credentials. As such, he argues, it is only fair that funders do the same for their clients.

He notes that banks could be making strong demands of housing associations whilst simultaneously investing in fossil fuels, which could represent a paradox to external stakeholders.

He says: “If the point of this is to have a positive impact on people and the planet, then that should absolutely be a two-way street.”